Fed Cuts Rates Amid Global Inflation Concerns, ECB SNB Hold Policies

In late 2025, the U.S. Federal Reserve has embarked on a cautious monetary easing cycle, cutting interest rates twice to stimulate a weakening labor market while grappling with persistent inflation above target levels. Despite these cuts, Fed Chair Jerome Powell emphasized uncertainty due to the U.S. government shutdown, indicating that further rate reductions are not guaranteed, reflecting a cautious approach amid economic fog. Other major central banks showed varied stances: the Bank of Japan and ECB held rates steady, the Swiss National Bank paused after cutting to 0%, and the Bank of Canada signaled the end of easing at a low rate of 2.25%. Global markets responded with optimism to the Fed's rate cuts, as seen in record highs in indices such as Brazil's Ibovespa and strong performances in AI-related stocks like Nvidia and Broadcom, which also saw raised price targets. However, inflation concerns, geopolitical tensions, and divergent monetary policies worldwide continue to create a complex economic environment. Additionally, markets are attentive to upcoming geopolitical events, including a high-profile meeting between President Trump and Chinese leader Xi Jinping, which could influence trade relations and market sentiment.